PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 4, Problem 33P
What happens to the
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The U.S. Department of Agriculture guarantees dairy producers that they will receive at least $1.00 per pound for butter they supply to
the market. Below is the current monthly demand and supply schedules for wholesale butter (in millions of pounds per month).
Market for Wholesale Butter
Price (dollars
per pound)
$0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
Quantity of Quantity of
Butter
Butter
Demanded
Supplied
(nillions of (millions of
pounds)
109
106
103
100
97
94
91
88
85
82
B
79
pounds)
65
73
81
89
97
105
22 million pounds
79 million pounds
113
121
129
137
145
Instructions: Round your answer for price to two decimal places. Enter your answers for quantity as a whole number.
a. What are the equilibrium price and quantity in the wholesale butter market?
P = $
Q=
million pounds
b. What is the monthly surplus created in the wholesale butter market due to the price support (price floor) program?
zero
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The demand for onions is very inelastic. Draw a supply/demand diagram that shows how the equilibrium price and quantity will change when a drought reduces supply. Label the axes and the prices and quantities both before and after the supply change. Then, write a few sentences explaining what happened to prices relative to quantities and why.
The table below illustrates the market's demand and supply for cheddar cheese.
Price Per Pound[$]
Quantity demanded
Quantity Supplied
3.00
320
200
3.50
280
220
4.00
240
240
4.50
200
260
5.00
160
280
A new study says that eating cheese is good for your health, so that demand increases by 30% at every price. What is the equilibrium quantity in the market after the study?
Chapter 4 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - In the labor market, what causes a movement along...Ch. 4 - Why is a living wage considered a price floor?...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - In the financial market, what causes a movement...Ch. 4 - If a usury law limits interest rates to no more...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Which of the following changes in the financial...Ch. 4 - Identify the most accurate statement. A price...Ch. 4 - A price ceiling will have the largest effect:...
Ch. 4 - Select the correct answer. A price floor will...Ch. 4 - Select the correct answer. A price ceiling will...Ch. 4 - What is die price commonly called in the labor...Ch. 4 - Are households demanders or suppliers in the goods...Ch. 4 - Name some factors that can cause a shift in the...Ch. 4 - Name some factors that can cause- a shift in the...Ch. 4 - How do economists define equilibrium in financial...Ch. 4 - What would be a sign of a shortage in financial...Ch. 4 - Would usury laws help or hinder resolution of a...Ch. 4 - Whether the product market or the labor market,...Ch. 4 - Other than the demand for labor, what would be...Ch. 4 - Suppose that a 5 increase in the minimum wag...Ch. 4 - Under what Circumstances would a minimum wage be a...Ch. 4 - Suppose the U.S. economy began to grow more...Ch. 4 - If the government imposed a federal interest rate...Ch. 4 - Why are the factors that shift the demand for a...Ch. 4 - During a discussion several year; ago on building...Ch. 4 - Identify each of the following as involving either...Ch. 4 - Predict how each of the following events will...Ch. 4 - Predict how each of the following economic changes...Ch. 4 - Table 4.6 shows the amount of savings and...Ch. 4 - Imagine that to preserve the traditional way of...Ch. 4 - What happens to the price and the quantity bought...
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